So let me get this straight. You believe its a downgrade to have turn by turn navigation? I'm not sure if you realize this or not but users are going to find that having turn by turn directions is definitely an upgrade over losing Street View.
It really isn't because turn by turn is already available for anyone who wants it in plenty of existing apps. Unless Google does make their own maps app (which I'm not saying they won't) there is no other way of getting streetview - a loss of functionality is a downgrade however you spin it.